OFFSHORE SECURITIES SUBSCRIPTION AGREEMENT
THIS OFFSHORE SECURITIES AGREEMENT is executed in reliance upon the
transaction exemption afforded by Regulation S ("Regulation S") as
promulgated by the Securities and Exchange Commission ("SEC"),
under the Securities Act of 1933, as amended ("1933 Act" or the
"Act").
THIS AGREEMENT has been executed by the undersigned in connection
with the private placement of shares of Common Stock (hereinafter
referred to as the "Shares") of Management Technologies, Inc.,
located at 335 Madison Avenue, New York, New York 10017, United
States of America (hereinafter referred to as "Management
Technologies", the "Company" or the "Seller"). The undersigned
Hillside Industries, Inc., a corporation organized under the laws
of Panama jurisdiction (hereinafter referred to as "Buyer" or
"Purchaser"), hereby represents and warrants to, and agrees with
Seller as follows:
1. AGREEMENT TO SUBSCRIBE; PURCHASE PRICE
(a) The undersigned hereby subscribes for 211,982 shares post
reverse split of 15 May 1995 of Management Technologies, Inc. and
tenders as consideration therefore, a certified check or wired
proceeds of gross amount of US $230,000 payable in US Dollars.
(b) Form of Payment. Buyer shall pay the purchase price by
delivering good funds in United States Dollars to the designated
depository for closing by delivery of securities versus payment.
2. SUBSCRIBER REPRESENTATION;
ACCESS TO INFORMATION;
INDEPENDENT INVESTIGATION
(a) Offshore transaction. The Buyer represents and warrants to the
Seller as follows:
(i) The Buyer is not a U.S. person as the term is
defined under Regulation S as promulgated by the
SEC under the authority of the 1933 Act;
furthermore the Buyer is not organized under the
laws of the United States and was not formed for
the purpose of investing in Regulation S securities
and is not registered under the Securities Act;
(ii) At the time the buy order was originated, the
Buyer was outside the United States;
(iii) No offer to purchase the Shares was made in
the United States and the sale has not been pre-
arranged in the United States;
(iv) The Buyer is not purchasing on behalf of any
U.S. person or with a view towards distribution in
violation of this agreement or Regulation S or for
distribution to any non US person who is not
purchasing the shares for investment and not with a
view to distribute or resale. The buyer
acknowledges that to the extent that it sells any
shares it may be deemed a distributor for the
purpose of Regulation S and this Agreement;
(v) All subsequent offers and sales of the Shares
shall be made in compliance with Regulation S
pursuant to registration of securities under the
Securities Act of 1933 or pursuant to an exemption
form registration. In any case, the Shares shall
not be resold to U.S. persons or within the United
States during the prohibited period of forty days
commencing on the date of closing of the purchase
of the Shares or upon the date of the last closing
of Shares sold by or through a distribution if the
Shares are part of a distribution by a distributor,
as that term is defined in Regulation S
("Restricted Period");
(vi) The Buyer understands that the Shares are
being offered and sold to it in reliance on
specific exemptions from the registration
requirements of Federal and State securities laws
and that the Seller is relying upon the truth and
accuracy of the representations, warranties,
agreements, acknowledgments and understandings of
Buyer set forth herein in order to determine the
applicability of such exemptions and the
suitability of Buyer to acquire the Shares.
(vii) All offers and sales of the Shares prior to
the expiration of the Restricted Period shall be
made in compliance with Rule 903 or Rule 904,
pursuant to registration of securities under the
1933 Act or pursuant to an exemption and each
distributor, if any, participating in the offering
the Shares has agreed in writing to that effect;
(viii) In the event of resale of the Shares during
the Restricted Period, the Buyer shall provide a
written confirmation or other written notice to any
distributor, dealer or person receiving a selling
concession, fee or other remuneration in respect of
the Shares stating that the purchaser is subject to
the same restrictions on offers and sales that
apply to a distributor, and shall obtain the
agreement of any such purchaser to provide such
written confirmation or other notice upon resale
with the restricted period;
(ix) All offering documents received by the Buyer
shall include statements to the effect that the
Shares have not been registered under the 1933 Act
and may not be offered or sold in the United States
or to U.S. persons during or after the Restricted
Period, unless the Shares are registered under the
1933 Act or an exemption from the registration
requirements or the 1933 Act is available.
(b) Independent Investigations Access. The Buyer, in making the
decision to purchase the Shares subscribed, has relied upon
independent investigations made by it and its representatives, if
any, and the Buyer and such representatives, if any, have prior to
any sale to it, been given access and the opportunity to examine
all material books and records of the Company, all material
contracts and documents relating to this offering and an
opportunity to ask questions of, and to receive answers from the
Company or any person acting on its behalf concerning the terms and
conditions of this offering. The Buyer and its advisors, if any,
have received complete and satisfactory answers to any such
inquiries. The Buyer and its advisors, if any, have been furnished
with all materials relating to the business, finances and operation
of the Company and materials relating to the offer and sale of the
Shares which have been requested.
(c) No Government Recommendation or Approval. The Buyer
understands that no Federal or State agency has passed on or made
any recommendation or endorsement of the Shares.
3. SELLER REPRESENTATIONS
(a) Reporting Company Status. The Seller is a "Reporting Company"
as defined by Rule 902 of Regulation S. Seller is in full
compliance, to the extent applicable, with all reporting
obligations under either Section 12(b), 12(g) or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
Seller has registered its Common Stock pursuant to Section 12 of
the Exchange Act and the Common Stock trades on the National
Association of Securities Dealers Automated Quotation System
(NASDAQ) under the symbol "MTCI".
(b) Current Public Information. The Seller has furnished the
Buyer with copies of the Company's most recent Annual Report on the
Form 10-K filed with the Securities and Exchange Commission and the
Forms 10-Q and 8K filed thereafter (collectively the "SEC
Filings"), and other publicly available documents.
(c) Offshore Transaction. The Seller represents and warrants as
follows:
(i) The Seller has not offered the Securities which are
the subject of this transaction to any person in the
United States, any identifiable groups of U.S. citizens
abroad, or to any U.S. person as the term is defined in
Regulation S.
(ii) At the time the buy order was originated, the
Seller and/or its agents reasonably believed the Buyer
was outside of the United States and was not a U.S.
person.
(iii) The Seller and/or its agents reasonably believe
that the transaction has not been pre-arranged with a
buyer in the United States.
(d) No Direct Selling Efforts. In regard to this transaction the
Seller has not conducted any "directed selling efforts" as the term
is defined in Rule 902 of Regulation S nor has the Seller conducted
any general solicitation relating to the offer and sale of the
securities which are the subject of this transaction to persons
resident with the United States or elsewhere.
(e) Concerning the Shares. The Shares when issued and delivered
will be duly and validly authorized and issued, fully paid and non
assessable and will not subject the holders thereof to personal
liability by reason of being such holders. There are no preemptive
rights of any shareholder of the Company with respect to any shares
of the Company subscribed thereof.
(f) Subscription Agreement. The Subscription Agreement has been
duly authorized, validly executed and delivered on behalf of the
Seller and is a valid and binding agreement in accordance with its
terms, subject to general principles of equity and to bankruptcy or
other laws affecting the enforcement of creditors' rights
generally.
(g) Non-contravention. The execution and delivery of the
Subscription Agreement and the consummation of the issuance of the
Shares and the transactions contemplated by the Subscription
Agreement do not and will not conflict with or result in a breach
by the Seller of any of the terms of provisions of, or constitute a
default under, the articles of incorporation or by-laws of the
Seller, or any indenture, mortgage, deed of trust of other material
agreement or instrument to which the Seller is a party or by which
it or any of its properties or assets are bound or any existing
applicable law, rule or regulation or any applicable decree,
judgment or order of any court, Federal or State regulatory body,
administrative agency or other governmental body having
jurisdiction over the Seller or any of its properties or assets.
(h) Approvals. The Seller is not aware of any authorization,
approval or consent of any governmental body which is legally
required for the issuance and sale of the Shares as contemplated by
the Subscription Agreement.
4. ADDITIONAL REPRESENTATIONS
The Buyer represents and warrants to the Company and agrees that:
(i) The Buyer understands the restrictions on transfer
of the Shares imposed by this Agreement, U.S. securities
laws and regulations and the laws and regulations of any
other applicable country or jurisdiction, including,
without limitation, those set forth in Paragraphs 5 and
6 hereof, which apply both during and after the
Restricted Period notwithstanding the absence of any
legend pertaining to such restrictions on the
certificates representing the Shares.
(ii) The Buyer has not taken any action that would
cause the Company to be subject to any claim for
commission or other fee or remuneration by any broker,
finder or other person and the Buyer hereby indemnifies
the Company against any such claim caused by the actions
of the Buyer or any of its employees or agents.
5. REGULATION S TRANSFER RESTRICTION
The transaction restriction in connection with this offshore offer
and sale restrict the Buyer from offering or selling to U.S.
persons for a forty (40)-day period. Rule 903 (c)(2)(iii) governs
the forty (40) day transaction restriction. The Buyer hereby
agrees to comply with that restriction not withstanding that the
rules do not require the placement of such a restrictive legend on
the share certificate.
6. RESTRICTION ON RESALES IN THE UNITED STATES
Section 5 of the 1933 Act does not apply to sales of the Shares
outside the United States. Rule 904 provides a safe harbor for
determining that a resale has occurred outside the United States.
Section 5 of the 1933 Act prohibits resale of the Shares in the
United States except pursuant to an effective registration
statement or an exemption from registration for which the Buyer
qualifies. The Buyer understands the requirements for qualifying
for the exemption form registration afforded by Section 4(l) of the
1933 act and that there can be no assurance that the Buyer will be
able to qualify for exemption afforded by Section 4(l) of the 1933
Act. The Company shall have no liability in the event the Buyer is
unable to qualify for the exemption afforded by Section 4(l) and is
unable to offer, sell or otherwise transfer the Shares in the
United States.
7. EXEMPTION; RELIANCE ON REPRESENTATIONS
The Buyer understands that the offer and sale of the Shares are not
being registered under the 1933 Act. The Seller is relying on the
rules governing offers and sales made outside the United States
pursuant to Regulation S. Rules 902 through 904 of Regulation S
govern this transaction.
8. TRANSFER AGENT INSTRUCTIONS
The Seller's agent will be instructed to issue one or more share
certificate representing the Shares with a self-liquidating
restrictive legend in the name of the Buyer and in such
denominations to be specified prior to Closing. The self-
liquidating legend shall be structured to liquidate on the date of
the forty first (41) day after the date of this Subscription
Agreement. Seller further warrants that no instructions, other
than these instructions and instructions for a "stop transfer"
instruction until the end of the said forty (40) day period, have
been given to the transfer agent and that the Shares shall
otherwise be freely transferable on the books and records of the
Company. After the end of the said forty (40) day period, Seller
and its counsel hereby agree to instruct the Seller's transfer
agent to remove any and all restrictive legends on said
certificates. Nothing in this section, however, shall affect in
any way the Buyer's obligations and agreement to comply with all
applicable securities laws upon resale of the Shares.
9. STOCK DELIVERY INSTRUCTIONS
The share certificates shall be delivered to the Buyer on a
delivery versus payment basis at such times and places to be
mutually agreed.
10. CLOSING DATE
The date of the issuance of the sale of the Shares (the "Closing
date") shall be at such times to be mutually agreed.
11. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL
The Buyer understands that the Seller's obligation to sell the
Stock is conditioned upon:
(a) The Receipt and acceptance by the Seller of this Subscription
Agreement for all of the Shares as evidenced by execution of this
Subscription Agreement by the President or any Vice President of
the Seller; and
(b) Delivery into the closing depository by the Buyer of good
funds as payment in full for the purchase of the Shares.
12. CONDITIONS TO THE BUYER'S OBLIGATION TO PURCHASE
The Seller understands that the Buyer's obligation to purchase the
Stock is conditioned upon:
(a) Acceptance by the Buyer of a satisfactory Subscription
Agreement for the sale of shares; and
(b) Delivery of the Shares of Common Stock without any restrictive
legend other than such legend as described herein.
13. GOVERNING LAW
This Agreement shall be governed by and interpreted in accordance
with the laws of the State of Delaware. A facsimile transmission
of this signed agreement shall be legal and binding on all parties
hereto.
IN WITNESS WHEREOF, this Offshore Securities Subscription Agreement
was duly executed on the date first written below.
DATED this 25th day of the month of May , 1995.
OFFICIAL SIGNATORY OF THE BUYER
By: /s/B. Moran
ACCEPTED BY: For and on Behalf
Management Technologies, Inc. Hillside Industries,Inc.
By: /s/Anthony J. Cataldo
Anthony J. Cataldo, Chairman & CEO
By:________________________
S. Keith Williams, President & COO
Dated: May 25, 1995
Initial: Anthony J. Cataldo: /s/AJC S. Keith Williams: _____